IT staffs expected to shrink in coming year

Sep. 23, 2013 - 06:00AM
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Federal IT staffs are likely going to start shrinking next year, experts say.

Among the reasons for the decline:

■ Continued pressure from sequestration and budget cuts.

■ The gradual migration of federal IT infrastructure to the cloud.

■ The consolidation of programs leading to fewer employees and contractors.

Van Hitch, former Justice Department CIO and senior adviser at government consultant Deloitte Inc., said agencies should be planning for ways to responsibly reduce the sizes of their IT workforces.

“They really do need to figure out how big their workforces ultimately need to be,” Hitch said.

He said agencies will mostly rely on attrition to reduce staff numbers but some will also cut contractor workforces and use technology to operate with fewer people.

Many agencies were able to avoid numerous furloughs and staff cuts this year by cutting costs in areas such as training and lower-priority programs. But IT managers will not likely be able to absorb future budget gaps without larger cuts, he said.

“Ultimately, when you are dealing with stark reality and stark numbers, you have to consider everything,” Hitch said.

A Sept. 12 report by banking firm Goldman Sachs projects that sequestration will force federal agencies to shed 100,000 jobs over the next year. At least some of those will be IT jobs, according to Trey Hodgkins, senior vice president of global public-sector government affairs at TechAmerica.

“People with specific cyber skills will probably have exceptions, but I would expect this to be fairly equitably applied otherwise,” Hodgkins said.

He said the next fiscal year will be a tougher year for agencies because the reality of prolonged budget cuts has “sunk in” and managers will have to begin cutting IT staffs and figuring out ways to do the same work with fewer people.

“We are not going to be able to furlough people — we are not going to have the money to keep them at all,” he said.

Agencies will need to become more efficient by consolidating data centers and moving more services to the cloud. That will allow the resulting smaller IT staffs to be just as effective.

“These are technologies that can augment the capabilities of the remaining staff,” Hodgkins said.

Federal officials interviewed for this story would not address potential future staff cuts but all agreed that increased migration toward cloud services and program consolidation were part of their agencies long-term plans.

“DHS is currently migrating from an asset to service culture, and is currently leveraging 12 cloud-based services,” said acting Department of Homeland Security CIO Margie Graves.

Anthony Robbins, vice president of the federal division at networking company Brocade, said the government spends about $80 billion a year directly on IT programs and roughly $60 billion of that is personnel costs. By moving toward a model that relies more on purchasing services rather than maintaining equipment, IT offices can do more with fewer people.

“What the government is going through is perhaps the broadest and most dynamic transformation the government has ever been through,” Robbins said.

Agencies like the Federal Aviation Administration are already doing this. FAA is finishing up a two-year consolidation of its IT acquisition and contracting operations, a move the agency says will save $36 million this fiscal year.

The end result will be a central office that coordinates purchases, contracts and the development of IT systems and programs that will leverage the agency’s buying power and avoid duplication of effort, according to the agency.

Marketing research firm Deltek projects that direct and indirect federal IT spending will fall from $112 billion this year to $102 billion by fiscal 2018.

Deniece Peterson, director of federal industry analysis at Deltek, said IT spending until now has been relatively insulated compared with other budget areas, but the sequester cuts are sure to have an impact in the coming years.

“A lot of the staff reductions are happening for them,” Peterson said.